EE fined £2.7m for overcharging customers

EE has today been fined £2,700,000 by Ofcom for overcharging tens of thousands of its customers.

The penalty is the result of an investigation into the mobile phone provider, which found that the company broke a fundamental billing rule on two separate occasions.1

First, EE customers who called the company’s ‘150’ customer services number while roaming within the EU were incorrectly charged as if they had called the United States.

This mistake saw customers charged £1.20 per minute, instead of 19p per minute. As a result, at least 32,145 customers were overcharged around £245,700 in total.2

Ofcom’s investigation found that EE’s carelessness or negligence contributed to these billing errors.(3) In addition, while it did not set out to make money from its billing mistake, EE had decided not to reimburse the majority of affected customers until Ofcom intervened. EE wrongly decided it couldn’t identify the people it overcharged and was proposing to give their money to charity, which would have left them out of pocket.

Second, despite making it free to call or text the ‘150’ number from within the EU from 18 November 2015, EE continued to bill 7,674 customers up until 11 January 2016. In total, these customers were overcharged £2,203.33, although EE did take prompt action on this occasion and issued full refunds to those affected.

Lindsey Fussell, Ofcom’s Consumer Group Director, said: “EE didn’t take enough care to ensure that its customers were billed accurately. This ended up costing customers thousands of pounds, which is completely unacceptable.

“We monitor how phone companies bill their customers, and will not tolerate careless mistakes. Any company that breaks Ofcom’s rules should expect similar consequences.”

Financial penalty and customer refunds

As a result of these failings, Ofcom has today imposed a penalty of £2,700,000 on EE. The fine, which must be paid to Ofcom within 20 working days, will be passed on to HM Treasury.

The penalty incorporates a 10% reduction to reflect EE’s agreement to enter into a formal settlement, which will save public money and resources. As part of this agreement, EE admits and takes full responsibility for the breaches.

Ofcom recognises that the majority of customers have now been refunded. However, EE was unable to identify at least 6,905 customers, who were more than £60,000 out of pocket in total.

EE has made a donation of just under £62,000 to charity in lieu of the payments owed to these customers. However, in addition to today’s fine, Ofcom is requiring EE to make further attempts to trace and refund every customer who was overcharged.

ENDS

NOTES FOR EDITOR

Ofcom opened an investigation into EE on 29 January 2016. Evidence gathered during the course of this investigation showed that EE twice breached one of Ofcom’s most important billing rules –General Condition 11.1 (PDF, 454.6 KB), which is designed to ensure customers are charged correctly for the services they receive.

How 150 callers were charged for calling the United States On 16 September 2015, Ofcom received notification from Tüv Süv BABT, the company that approves EE’s metering and billing system, of an ‘Extraordinary Performance Failure’ in relation to that system. This was caused by EE in 2008 instructing its third-party data clearing house to remove the 44 UK international dialling code from the records of customer calls made to certain short code numbers, including EE’s customer service number ‘150’. This meant that, between 1 July 2014 and 20 July 2015, EE’s billing system interpreted the leading ‘1’ digit as the international dialling code for the United States.

Ofcom’s investigation found that in some respects EE acted carelessly or negligently. It:

gave a third party supplier instructions that led to the first contravention;

did not check these instructions were implemented correctly; and

did not test the tariff changes that produced the overcharging either beforehand or when it implemented them.

In addition, EE did not preserve detailed billing records, warn customers, or notify promptly Tüv Süv BABT, which would have helped it to identify and reimburse affected customers.